The UK's small and medium sized businesses are missing out on valuable funding opportunities because they cannot recruit the right skills to their boards.
According to a survey of venture capital fund managers released today by executive search firm Intramezzo, 90 per cent said that a strong leadership team was one of their top criteria for investing in a business, but 81 per cent also cited problems finding the right talent as a barrier to growth for their portfolio companies.
Also, 85 per cent said they were unlikely to back a company that lacked a leadership team with the necessary skills, but nearly 90 per cent said that finding executives with the right talents is a challenge when making senior hires.
"The makeup of the executive board is crucial to the success of any organisation, but more so for startups and high-growth businesses, where they do not yet necessarily have a proven business model or high-levels of revenue," said Dermot Hill, chief executive of Intramezzo. "The tech scene in the UK is thriving but we are struggling to produce many unicorns (companies valued at $1bn or above) or global giants, and a lack of executive talent could be the main reason why."
Over a quarter of respondents also said they either always or frequently oust the chief executive of the companies they invest in, usually because the organisation quickly outgrows the original boss' skillset.
Hill remarked: "Ambitious start-ups need a chief executive in place who has the potential to be a leader of a £100m business, not just a £1m business. Thinking more strategically about identifying the talent that is needed as the business grows is key to achieving this."